Elie Mystal

The quest to make education "affordable" to every American has meant that every young person now has the opportunity to take on a crippling amount of debt that will ruin their lives. The Associated Press reports that roughly 37 million Americans are now saddled with a total of $1 trillion in student loan debt. Student debt now totals more than credit card debt or car debt.

And while "education" might be inherently more worthwhile than a new Chevy, let's not forget that university presidents, deans, and faculty are pocketing all of this money just as fast as students can fill out a FAFSA application...

Student loans haven't made education "affordable," they've made education accessible. That's a huge difference. Once you access your education, you still have to pay for it. And if you've happened to access more education than you can afford, well, you're going to have a hell of a time "accessing" other life goals: like a house, a car, or a modicum of financial security.

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The deleterious effect of high student loan indebtedness can be clearly seen when indebted graduates have to compete with people who went to school for free:

"If you graduate with a B.A. or doctorate and you get the same job at the same place, you make the same amount of money," said William Elliott III, director of the Assets and Education Initiative at the University of Kansas. "But that money will actually mean less to you in the sense of accumulating assets in the long term."

Graduates who can immediately begin building equity in housing or stocks and bonds get more time to see their investments grow, while indebted graduates spend years paying principal and interest on loans. The standard student loan repayment schedule is 10 years but can be much longer.

The median 2009 net worth for a household without outstanding student debt was $117,700, nearly three times the $42,800 worth in a household with outstanding student debt, according to a report co-written by Elliott last November.

Now is about the time when old people say, "In my day, I worked my way through college, uphill, both ways, and graduated debt free."

Thanks Gramps. But in your day, college was entirely more affordable than it is now. Here are three sentences from Forbes that I've been hurling at self-aggrandizing Boomers for the past year:

Since 1982 a typical family income increased by 147%, more than inflation but significantly behind the huge increase in college costs. College costs have been rising roughly at a rate of 7% per year for decades. Since 1985, the overall consumer price index has risen 115% while the college education inflation rate has risen nearly 500%.

Your experience, graduating from college in 1984 or something, is f**king irrelevant to the issues facing young people today.

Of course, the reason college costs have skyrocketed is because of easy access to student loans. Colleges and professional schools can charge whatever they want, because young people can just borrow the money and worry about it later. And if the bet goes bad and students don't make enough as graduates to manage their debts, the colleges don't care. They've already been paid and have moved onto fleecing the next incoming class. If the students eventually default, it's the taxpayers who pick up the bill.

Running a university is like running a casino where the house wins if the player loses OR if the player wins.

I've argued for years that the solution involves making colleges responsible for the prices they charge. Here's my response to the latest misguided government attempt to address student loan problems without forcing universities to get some skin in the game. As long as universities can access student loan money without caring if the borrowers are making good investments, tuition will continue to go up.

What is a student to do while politicians and "educators" conspire to price-gouge them? You're not going to like the answer, but it's easier to explain with a specific reference to legal education — the price-gougiest of all price-gougers.

Students trying to avoid the long term consequences of student debt need to either have rich parents or to go to sh*ttier schools. There's just no other way around it. In law, if you get into a good school at full price, there is always some crappy school offering a free ride.

That's easy for me to say. I went to the best schools I could get into, fully debt-financed my education, have a job that I could have performed (but wouldn't have been hired for) with a high school diploma, and would be in even more of a soul-crushing debt spiral if not for the grace of my wife who is using her education to make a sh*tload of money (relatively speaking).

But when you look at the experience of this guy cited in the AP article, you can see that there were really only a few reliable ways out of his predicament:

At the other end of the spectrum is [Gregory] Zbylut, an accountant-turned-attorney in Glendale, Calif. He's been chipping away at nearly $160,000 in student debt since graduating in 2005 from law school at Loyola University in Chicago. Now 48, the tax attorney estimates he could have $150,000 to $200,000 in a 401(k) had the money he's paid toward loans gone there.

"I'm sitting here in traffic. I've got a Mercedes behind me and an Audi in front of me and I'm thinking, 'What did they do that I didn't do?'" Zbylut said by cellphone from his Chevrolet. He's been turned down twice for the type of mortgage he needs to buy a home big enough for himself, the fiancee he would have married already if not for his debts and her 10-year-old son.

"I have more education and more degrees than my father, as does she than her parents, and yet our parents are better off than we are. What's wrong with this picture?" he said.

Loyola Chicago is a good enough law school that there was probably a worse one offering Zbylut more scholarship money. Or perhaps Zbylut could have delayed his entrance into a law school while he improved his test scores, so that Loyola would have offered him more money. But absent wealthy parents who were going to pay for law school, the only thing Zbylut could have done differently was massively reduce his debt profile by sacrificing time or prestige or both. Going to the best school you can get into, regardless of cost, is just not the financially sound investment that it used to be.

And remember, Zbylut graduated in 2005, before the bottom fell out of the market in legal employment. If he had graduated from Loyola in 2009, he might be washing Mercedes and Audis instead of being stuck in traffic behind them.

Everybody will tell you that education is the "silver bullet" to getting the American dream. But the cost of education makes it a double-edged sword. You're not going to get anywhere without it, but if you spend too much, it'll weigh you down and hold you back.

Really, students shouldn't go for as much education as possible, they should go for as much as they need, and not a penny more.